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December 2016

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The Government of Canada has officially complained to the World Trade Organization (WTO) and sought consultations over China’s continued levy of anti-dumping duties on dissolving pulp, used to produce rayon in the textile industry.

In its filing, Canada claimed that preliminary and final anti-dumping duty imposed on dissolving pulp by China in November 2013 and April 2014, respectively, “appear to be inconsistent with China’s obligations under various provisions of the Anti-Dumping Agreement and the General Agreement on Tariffs and Trade (GATT) 1994.”

China’s Ministry of Commerce had first launched an anti-dumping probe into cellulose pulp originating in the US, Canada and Brazil in February 2013. Subsequently, in its preliminary ruling in November, the Ministry levied a provisional anti-dumping measure.

Then in its final ruling in April 2014, the Ministry concluded that companies from the US, Canada and Brazil have dumped cellulose pulp in the Chinese market causing substantial damage to the domestic industry. As such, the Ministry decided to impose anti-dumping duties for a period of five years on dissolving pulp imported from the US, Canada and Brazil.

“China imposed preliminary duties on imports of dissolving pulp from Canada of 13 percent in November of 2013 and in April of 2014 they became permanent. These anti-dumping duties are resulting in significant loss of market for Canadian dissolving pulp producers,” the Forest Products Association of Canada (FPAC) said.

Canada has now requested for consultations—the first step in a dispute under the dispute settlement provisions of the WTO. The consultations process should begin within a maximum of 30 days from the date of the receipt of the request, and the maximum period for consultations is 60 days from the date of the receipt of the request, according to WTO provisions. If not resolved within 60 days, Canada can ask the WTO to adjudicate on the issue.

China imports nearly half of Canada’s 750,000 tons annual production of cellulose pulp, which is made from plant fibre and used as a raw material in the production of viscose and acetate fibre. (RKS)